January 20, 2020
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FM's Scorecard

FM's Scorecard
FDI cap increase in banking and energy sectors may turn out to be a non-starter; while no one wants to invest in oil & gas, there are voting rights restrictions for foreign investors in banking.

The security issue to retain the 49 per cent FDI cap in telecom is a bogey; already foreigners have hiked their stakes to nearly 70 per cent, exploiting policy loopholes.

Schemes to offer cheap loans to rural poor and for infrastructure projects may create further mess in the banking sector; while state-owned agencies need to raise Rs 60,000 crore at market rates, they will end up lending at much lower ones.

Customs duty cuts are quite dramatic—as high as 18-20 per cent in some segments; but this may have been done under increasing pressure from the Bush administration.

The flip-flop on ECBs within two months indicates lack of clarity among policymakers; it's evident that vested interests are influencing economic policies.

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